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What are the Blue-Chip Cryptocurrencies?

Lincoln Murr

Summary: With fear and uncertainty being the primary drivers of the current cryptocurrency market, investors are looking for proven coins that will be able to survive the next bear market. These coins have strong fundamentals, a proven track record, and a competitive edge that make them have the greatest potential for a strong rebound in the ...

With fear and uncertainty being the primary drivers of the current cryptocurrency market, investors are looking for proven coins that will be able to survive the next bear market. These coins have strong fundamentals, a proven track record, and a competitive edge that make them have the greatest potential for a strong rebound in the near future.

According to Investopedia, a blue-chip stock is “a huge company with an excellent reputation… typically, large well-established and financially sound companies that have operated for many years... generally the market leader.” This type of analysis can be used in the cryptocurrency market in order to find the coins that have the best chance of making it through another bear cycle and reaching new all-time highs in the future. In these markets, there are no balance sheets that investors can look at in order to determine the fundamental value of a cryptocurrency, but there are ways to determine what cryptocurrencies are blue-chips and most likely to be around for a long time.

To classify a blue-chip cryptocurrency, let’s use four criteria: First, the cryptocurrency has to have been around for at least four years, almost half of the lifespan of the cryptocurrency market. Second, there has to be a working product that can be used today with little risk of hacks, and not just a whitepaper and a vision. Third, the project must be unique, and have an advantage over its competitors. Fourth, the token or coin has to be economically sound, and not subject to lots of inflation. These criteria help ensure that projects are not hype-based, have the potential to survive a bear market, and ensure that investor’s funds are safe.

The first and most obvious blue-chip crypto is Bitcoin. It is by far the most resilient cryptocurrency on the planet, and boasts a massive hash rate that ensures that the network is nearly guaranteed to be accurate and free of fraud. It also has survived every single crash, even after having been declared dead by news publications over 400 times. Even though it is not the fastest or cheapest payment solution, it has the first-mover advantage, and thus is the most well-known cryptocurrency. If history is any indicator, Bitcoin will continue to be the dominant crypto well into the near future. 

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The second blue-chip is Ethereum. As the first smart contract platform, it has had a secure and working product for over five years, and has kept its title as the king of the smart contract platforms. After every crypto crash, Ethereum has come back stronger and reached new highs. Like Bitcoin, there are other technologically superior smart contract platforms, but they do not have nearly the same level of adoption and interest as Ethereum. It has more decentralized applications than all other platforms combined, and has major companies such as Visa looking at it for payment solutions. Furthermore, the release of Ethereum 2.0 will allow for incredibly fast and cheap transactions, along with proof-of-stake consensus, making it technologically superior over many other current smart contract platforms. 

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Even though Cardano, Polkadot, Cosmos, and Solana are compelling options for the blue-chip list, none of them have their final working product, or enough experience in the market to call them blue-chips. 

A third blue-chip cryptocurrency is the privacy coin Monero. It has been around since 2014 and has also survived every major crash. The technology used by Monero is so complex and cryptographically secure that nobody, not even government agencies, have been able to break it and figure out data about transactions. Though it has had trouble with being delisted from major exchanges and being potentially banned by countries, it is undoubtedly the king of the privacy coins, thus representing a significant sector of the crypto market. It is a blue-chip due to its resiliency, groundbreaking technology, and fair inflation rate of 1% annually.

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One of the more controversial blue-chip picks is DAI, the stablecoin issued by MakerDAO on Ethereum. Even though it is a stablecoin, it has all the properties of a blue-chip crypto. It was created in 2017, and kept its price stable at $1 since its inception, never failing after flash crashes or long bear markets. For investors who want to keep their money stable in cryptocurrency without having to use a centralized solution like USDT or USDC, DAI is a great and secure option.

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The final blue-chip crypto is Chainlink. In order for smart contract platforms to access data that is off the blockchain, such as sports scores, coin prices, and many other data sources, they need to use an oracle that aggregates this data. Chainlink is the biggest decentralized oracle platform, and is heavily used on many smart contract platforms and dApps, including Uniswap, Binance, Matic, Tezos, Polkadot, Solana, and Aave. Even though that feels like an exhaustive list, it hardly scratches the surface of the projects that Chainlink is integrating with, and the list is best summed up as every smart contract platform except Cardano and Cosmos. This level of integration within the space means that LINK will be providing data for these blockchains for as long as they are around. 

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Even though there are some notable omissions from this list, like Litecoin and Stellar, this list is filled with time-tested and fundamentally sound cryptocurrencies. Though their future cannot be guaranteed, they are all backed by hedge funds and institutional investors, and have the chance to lead the blockchain revolution for years to come. 

By Lincoln Murr

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